Subject: File Number S7-09-09

July 9, 2009

To Whom It May Concern:

The proposal to subject SEC-registered investment advisors who deduct fees from client accounts to annual surprise audits is a mistake. This rule would unfairly penalize small firms because the cost of the audit will be a much larger proportion of revenues than for larger firms. To make matters worse, it is doubtful that these surprise audits would be effective in detecting fraud. A better measure would be to require all investment advisors to explicitly spell out the calculation of the fees being deducted.